Aztek Limited v Attorney-General - [2018] NZHC 1839

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2016-404-2998

[2018] NZHC 1839

UNDER The Public Works Act 1981

BETWEEN

AZTEK LIMITED

First Plaintiff

TERESTA MAY PRUJEAN
Second Plaintiff

AND

THE ATTORNEY-GENERAL

Defendant

Hearing: 5, 6 and 7 June 2018

Appearances:

M E Casey QC and A J Casey for the Plaintiffs J R Burns for the Respondent

Judgment:

24 July 2018

JUDGMENT OF MUIR J

This judgment was delivered by me on Tuesday 24 July 2018 at 11.00 am Pursuant to Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar Date:…………………………

Counsel/Solicitors:
M E Casey QC, Barrister, Auckland. A J Casey, Barrister, Auckland.
J Burns, Barrister, Wellington.

AZTEK LIMITED v THE ATTORNEY-GENERAL [2018] NZHC 1839 [24 July 2018]

Introduction

[1] These proceedings raise a novel point under the “offer-back” provisions in s 40 of the Public Works Act 1981 (the Act) – provisions that have been the subject of significant academic criticism in the past1 and which continue to generate complex litigation on account of the size of the windfalls potentially available to plaintiffs who can establish an obligation to offer back at some earlier date when property values were at levels lower than those applying at the time the claim was brought.

[2]At issue in the case is the position of a company that was:

(a)vendor of the land that was acquired by the Crown;

(b)struck off at the time a decision was made that the land was no longer required for the purpose for which it was held;2 but

(c)has subsequently been reinstated to the Register for the purposes of pursuing a claim to recovery of the property.

[3] The central question for determination (reflected in alternate claims for breach of statutory duty and in judicial review) is whether the obligation in s 40(1) of the Act to “endeavour to sell the land in accordance with subsection (2) if that subsection is applicable to that land” includes an obligation to send a notice either to its former registered office and/or its former director/shareholder advising that the land is no longer required and giving such director/shareholder the reasonable opportunity to apply for reinstatement of the company.

[4] Predictably, as a result of rapidly increasing Auckland property prices, the present value of the property is likely to be substantially greater than its value at the time (2011 or 2012) when the plaintiffs say it should have been offered back to the

1 See for example Elizabeth Toomey The Offer Back Provisions in the Public Works Act 1981: Former Owners Chase Potential Spoils [2007] NZ Law Rev 659. In 2000 a public discussion paper Review of the Public Works Act; Issues and options (Land Information New Zealand, December 2000), suggested sweeping reform including abandonment of the offer-back right and advice to the former owner in terms only that the property would be offered in the open market. No such reform has yet occurred, however.
2 Or for any other public…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2018] NZHC 1839
Decision Date: 24 July 2018

CaseChat Overview and Summary

Aztek Limited and Teresita May Prujean sought a declaration that the Attorney-General was under a statutory duty to offer to sell them land that had been acquired by the Crown, and to set aside the decision that the land be exempted from offer back. They also sought judicial review of the decision. The land had been acquired in 2005 for the purpose of the Waterview Tunnel. In 2009, Aztek was struck off the register of companies for failure to file annual returns. In 2010, the New Zealand Transport Agency determined that the land was no longer required for the purpose for which it was held. In 2011, the Chief Executive of Land Information New Zealand decided that it was impracticable to offer back the land to the former owner. Aztek was reinstated in 2015. The plaintiffs argued that the Chief Executive had failed to make a reasonable attempt to locate Aztek's shareholder and director, Ms Prujean, and give her an opportunity to seek to restore Aztek to the register. The court rejected the claims. It held that the obligation to endeavour to sell the land in accordance with subsection (2) of s 40 of the Public Works Act 1981 did not require the Chief Executive to endeavour to sell the land to a party that did not exist. It followed that when the Chief Executive decided that the land was no longer required, and that it was impracticable to offer it back to the former owner because the former owner did not exist, the Chief Executive's obligations under s 40 had been discharged. The court also held that there was no obligation to notify Ms Prujean of the decision or to give her an opportunity to seek to restore Aztek to the register. It followed that the decision to exempt the land from offer back was not reviewable. The court also rejected the claim that the decision was premature. It held that it was open to the Chief Executive to exempt the land from offer back on the basis that it was impracticable to sell the land to the former owner, even if reservations were to be made from the title. The court gave judgment in favour of the Attorney-General and declined to exercise its discretion to award costs other than a 2B allowance.

Orders